Hey guys,

I was reading an article on dailyfx couple of days ago and there was this article on their forcast on the AUD/USD, and in their forecast they had this index called Speculative [something] Index, it shows the ratio of the ppl going long/short and is plotted on a chart. It seems like a useful tool and i was just wondering how i can get those types of information.

Any thoughts will be appreciated..

Thanks,

Peter

hi peter,

yes, sounds like you are referring to SSI. it's published weekly on dailyfx.com, and given out twice daily to fxcm customers.

the SSI is based on fxcm's proprietary customer trade data, so you may not be able to find it elsewhere. i would expect other brokers to eventually offer a similar service, if they are not doing so already.

You may also be interested in FXCM pivot points.

Hi Peter,

To add to what Simon has said here I use the Speculative Sentiment Index regularly and was involved in the development of it when I was at FXCM.

It is basically meant to act like the COT report, but because its published twice a day, it is much more timely.

Secondly, the indicator is scrubbed of large trades so the data that it reports is only small position sizes meant to be the most accurate to what the small speculators are doing.

Oanda publishes something similar, but I don't think they scrub their data for order size, a key difference if that is the case. Secondly, the more data you have in an indicator like this the more statistically significant it should be, so if other brokers do begin to offer something similar, FXCM's should still provide a much more accurate picture of what is going on since they have multiple times as many clients trading as most of the other brokers out there.

I will add to my todo list a video on how I use the indicator as I find it highly valuable, especially in forecasting the likelyness that a trend will reverse like we just saw.

If there are any questions or comments on this one in the meantime please feel free to post as always.

Best Regards,
Dave

__________________
Disclaimer: Trading is risky and can result in substantial financial loss. As always my posts are simply one traders opinion and should not be taken as trading advice. I am not a financial adviser so everyone please do their own analysis and take responsibility for their own trades.

hey simon and daivd,

thanks for ur fast responses...

What do you mean by a COT report?!?!

Thanks,,
Peter

Hey Peter,

Here is some info where you can learn about the COT report, which is a report put out on the futures markets that shows positioning for exchange traded currencies and other futures markets:

Using COT Report To Forecast FX Movements

If there are any other questions or comments please feel free to post as always.

Best Regards,
Dave

__________________
Disclaimer: Trading is risky and can result in substantial financial loss. As always my posts are simply one traders opinion and should not be taken as trading advice. I am not a financial adviser so everyone please do their own analysis and take responsibility for their own trades.